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Rambus' legal action against memory maker Micron appears to have had the rug pulled from under its feet this week when the European Patent Office said it will revoke one of the company's patents.

According to the EPO, the ruling relates to an Access Time Register patent, number EP 0525 068, granted in 2000 to Rambus in the UK, Germany, France and Italy. Rambus submitted the patent application in 1991.

In 2000, Micron, along with Infineon and Hynix asked the EPO to review Rambus' patent. In November 2002, the EPO decided to allow the patent to stand, provided Rambus made some modifications. A number of appeals against that decision were lodged between December 2002 and February 2003. Yesterday, following a series of public hearings this week, the EPO's Technical Board of Appeal yesterday announced its decision to cancel the patent.

In four to ten weeks' time, the EPO will issue a written ruling clarifying its decision. Rambus said it will respond to the EPO's move when it has seen that clarification. It also points out that the ruling has no effect on comparable patents granted in the US.

However, that didn't stop the company's stock from tumbling 17 per cent on the news, closing at $24.35, down $5.26. Today, the stock opened at $25.11, but by the time of writing had dropped back to $24.50.

Micron's stock closed at $15.84, down from a daily high of $16.30.

Rambus will soon hear if the US Federal Trade Commission has succeed in its action against the company. The FTC claims that Rambus covertly modified memory patents to incorporate technology that it knew industry body JEDEC was going to build into the SDRAM standard. Rambus denies the charge.

Micron, meanwhile, is pleased with the outcome. "This decision should result in the termination of a number of cases filed by Rambus against Micron in Europe," a spokesman told Reuters.

"There are additional oppositions against related Rambus patents currently pending in the EPO, and we expect the EPO to apply the same reasoning with respect to those patents," he added. ®